Nokia, the world's largest mobile phone maker, began building a factory in Vietnam on Monday.

The plant, located in the northern province of Bac Ninh, is expected to start production in early 2013. The Finnish company said the factory is being built to meet rising global demand.

"Thanks to the valued support from the Vietnamese government, our manufacturing program in Vietnam has been progressing well," said Mary McDowell, Executive Vice President, Nokia Mobile Phones. "The new Nokia manufacturing plant will produce and provide new devices for compelling and affordable, localized mobile experiences, particularly in the growth markets."

Nokia first entered the Vietnamese market in 1996. The company saw Vietnam as "a growing market with opportunity and potential," it said in the statement.